State Bank of India on Friday said it will introduce a repo rate-linked home loan product from July 1.
PK Gupta, Managing Director, SBI, said home loans under this product will be priced at 2.65 per cent over the repo rate of 5.75 per cent. So, the home loan interest rate will work out to 8.40 per cent.
Currently, India’s largest bank offers home loans, which are linked to its marginal cost of funds, at 8.55 per cent.
Following the Reserve Bank of India cutting its repo rate from 6 per cent to 5.75 per cent, SBI said the benefit of this cut will be passed in its entirety to cash credit /overdraft customers (limits above ₹1 lakh) banking with the bank with effect from July 1. Now the effective repo-linked lending rate (RLLR) for CC/OD customers is 8 per cent.